Those with low incomes might have to move out of Australia’s cities after the recently-released Rental Affordability Index painted a bleak picture for pensioners, single parents and people on welfare.
A single person living on benefits can no longer afford to live in Australian cities. Doing so was described as “untenable.”
In a lot of city postcodes, rents make up more than 100% of Newstart welfare payments ($17,400), or 150% in greater Sydney.
The report also claims that households paying 30% of income on rent are at the precarious brink for housing stress.
In a statement, SGS Economics and Planning partner Ellen Witte describes the predicament that students, pensioners and working families with kids face today in Australia’s cities.
“Renting fails to provide a secure roof over the heads of students, pensioners and working families with children,” she said in a statement.
“The reality is, 31 per cent of households rent and many will never have the opportunity to purchase their own home.
“In many countries renting is an affordable, long term and secure way of living but barriers to large scale investment in delivery models such as ‘build to rent’ put the Australian market in a headlock,” she added.
National Shelter Executive Officer Adrian Pisarski lent his two cents on the matter, saying that the surge in rent prices results in overcrowding, thus forcing people into homelessness.
Australia’s average rental household currently pays around 29% of income on rent in Sydney, 28% in Hobart, 25% in Brisbane and Adelaide, and 24% in Melbourne.
These figures mean that a renting household that makes less than $90,000 in Sydney or $84,000 in Melbourne would be in dire straits with regards to housing stress.
In the metro, where one-bedroom residences are usually available, 60% of a single pensioner’s income or $26,000 would go to rent, the report indicates.
The most unaffordable city, the report claims, is Sydney, which would need 97% of a person’s pension. Next on the notorious list is the ACT at 73%.
And a single parent, who is working part-time and on benefits, would not think of living in the major cities as these are considered “extremely unaffordable”, allocating around 71 % of their income ($38,000) on rent in Sydney, 59% in the ACT and 58% in Melbourne.